9:00AM New York - Germany’s biggest bank Deutsche Bank reported fourth quarter net income fell 47% to 1 billion euro from the same period last year where 355 million euro was in tax credits occasioned by the change in Germany’s tax law.

Quarterly Earnings Review

Deutsche Bank reported fourth quarter revenues rose 2% to 7.3 billion euro from the previous period last year.

In the quarter ended December 31st, net income declined 47% year-on-year to 1 billion euro as the fourth quarter in 2006 included 355 million euro from tax credits after the change in tax law.

Diluted earnings per share slid to 1.03 euro per share compared with 3.56 euro reported in the same period last year.

Net write-downs in the fourth quarter were less than 50 million euro.

Full-Year Earnings Review

The bank reported that net revenues for the full year ended December 31st increased 8% to 30.7 billion euro over the same period a year ago.

For the year, net income rose 7% to 6.5 billion euro, while diluted earnings per share spiked 14% to 13.05 euro per share from 11.48 euro in the year-ago period.

The average active equity in the year stood at 29.8 billion euro from 25.5 billion euro.

Business Segments

Corporate & Investment Banking Revenues

Fourth-quarter revenues in CIB were unchanged from the same period last year at 4.5 billion euro as revenues from Sales & Trading (debt and other products) fell 10% year-on year to 1.6 billion euro on weaker trading in asset backed securities. However, the trading businesses recovered, as the bank took no further losses in collaterised debt obligation exposures.

Revenues from Sales & Trading in equities rose 1% to 1.1 billion euro.

For the year, Sales & Trading in debt and other products slipped 7% to 8.4 billion euro and Sales & Trading in the equities division increased 14% to 4.6 billion euro.

Origination and Advisory Revenues

On the overall, fourth-quarter revenues generated from Origination and Advisory services fell 2% to 824 million euro from the previous comparative period notwithstanding the quarterly record increase in advisory revenues by 35% to 314 million euro.

Origination revenues for debt declined 13% due to the difficult environment that characterized the leveraged financial markets. Write-downs net of recoveries were less than 50 million euro.

Furthermore, origination revenues in the equity segment plunged 22% on lower primary issuance in the market.

For the year, origination and advisory revenues shed 8% to 2.7 billion euro from the year-ago period.